All Forum Posts by: Randy Frederick

@Bernie Huckestein

Yessir. All expenses factored in using the handy-dandy BP rental calculator!

Thanks again everybody! I am glad to hear more experienced investors echo what I thought to be true. 

Still in search of my first deal...

@Jaysen Medhurst and @John Leavelle

Thanks for taking a look at this! To be honest, I am not sure the seller would go for a price %70 of asking, but I thought I would give it a shot. He did move out of town and is looking to sell, so why not shoot for the moon?

The $850-900 for a 700 sq ft one bedroom does seem on par with the market, but I agree that the asking price seemed excessively high relative to rental income. As for the type of tenants, it seems to be attracting young singles/couples quasi-professional looking to live in a walkable urban area. 

Finally, regarding the financing, I suppose I was trying not to deploy all of my cash on hand into a downpayment for one property. Thinking it is necessary to have some reserve and additional cash on hand if another deal comes along. Is it difficult to get a seller to finance? Is it disadvantageous for them? I will admit, I have a tentative grasp on the matter.

I appreciate your input! Back to the drawing board.

Hello BPers!

Need some help analyzing my first potential deal:

It's a 4-plex in a burgeoning neighborhood in downtown Richmond, VA. Lots of development going on with associated gentrification. It is a newly constructed building, only two years old.

It has 4 one-bedrooms, each about 700sq ft.

Currently three are rented for $850, one for $900, for a total monthly income of $3450. One of the tenants is moving out at the end of this month. Possibly can increase rent to $900?

Landlord pays about $200 a month for water, other utilities paid by tenants.

Asking price is $499,000 which is completely out of reach.

Crunching the numbers, I think $350,000 would be reasonable. That would give me roughly $450 of monthly cash flow (about $100 per door), with cash on cash ROI of 7% assuming 20% down payment and minimal repairs. Further assumptions are 5% vacancy, 5% repairs/maintenance, 10% cap ex, and 10% management fees. Total monthly expenses hovering close to $3,000.

The owner has moved out of town, and according to his realtor is looking to unload the place. I don't know if he will even go for this, but it never hurts to ask!

One more question for the veterans, how would you work possible seller financing into the deal? Would you try to get 20% seller financing, 80% traditional, to minimize upfront cost? 100% seller financing? If so, would you be willing to accept a higher sales price to keep more liquid cash on hand?

Thanks for your help!  

Randy

Hey @Gregory A.! Welcome to the BP community!

I am also a US Navy veteran living in the Richmond area. Like you, I am ultimately interested in buying and holding multifamily properties. And also, similarly, I have spent the last year reading, listening, getting my real estate license, and waiting until I felt ready to pull the trigger. 

Unfortunately, I don't have any experience or resources to share with you at this point. However, I am always willing to meet like-minded people and build a network or potentially form a partnership. If you want to meet up for a beverage of some sort, hit me up!

Randy

@Taylor L.

I am looking to get connected into some networking groups. If you let me know when and where, I will certainly make every effort to attend! Of course, my schedule is often hectic and random, frequently into the nighttime hours. But if I know well enough in advance, I can plan accordingly. Please let me know!

@Linda S.

Glad to see another RVA-er!

Excellent points. Writing a business plan is definitely on the agenda. I have heard people label neighborhoods as A/B/C/D. How do you determine what qualifies a neighborhood as such?

Contractors do seem to be the bane of RE investors. Any recommendations would be welcome!

I would like to reach out to you and pick your brain sometime, if you are willing? There's some sort of food and/or beverage in it for ya!

Thanks for the advice!

Randy

@Account Closed

Thanks for the welcome!

@Ozzy Sirimsi 

Thanks for the welcome and the advice! 

I will certainly start there in my search for a broker. And I am confident I will be here to ask many questions along the way. What a great resource to have!

Hello BP community!

Long time listener, first time poster. I work full time as an Emergency Physician and am a husband and father of two. As you might imagine, my job is pretty stressful and the burnout is real. About a year ago, it became clear to me that a 20-30 year career seemed infeasible, so I began to search for another course to financial freedom. Enter real estate investing. Since that realization, I have been reading all the books I can get my hands on, devouring hours and hours of BP podcasts...and ultimately did the requisite work to obtain my real estate license (passed the exam yesterday!).

My goal is to focus on buy and hold multi-family units in the Central Virginia market. I want to purchase my first rental property by the end of this year, and then do 1-2 deals a year for the next several years until I am at a place that I can begin to scale up. Perhaps some commercial investing is in the future, but that will be decided at a later date.

I am eager to get started, but also quickly overwhelmed when I think about all that I have still yet to learn. I think I have a relatively good grasp on how to analyze a deal and how to interpret the numbers. What is not clear to me, is how to "learn the market." How does one go about finding the "good" neighborhoods to invest in? How do you know if your market is heating up or cooling down? How can you tell if the local economy and demographics are changing for the better or worse? There seems to be a lot of new construction popping up everywhere, how do you know when the supply of housing outstrips demand? Please forgive me for the rambling list of macroeconomic inquiries. 

Also, somewhat unrelated, now that I passed the real estate exam, I have to find a broker in order to activate my license. Are there brokers out there for investors who aren't looking to do retail real estate? How do you find them?

Thanks! I am looking forward to a bright future as a real estate investor!

Randy